Loan recovery drive by bank leads to a man?s death

This is the second death in Nashik where a person lost his life due to harrasment from recovery agents, reports Zeeshan Shaikh.

Almost a fortnight after the Supreme Court deplored the use of musclemen to recover loans from defaulters, Manish Rajguru passed away due to the alleged use of strong-arm tactics by the recovery agents of Nashik Merchant Co-operative Bank.

Rajguru’s wife Dr Devang Rajguru, a MD in Pathology said, "We were facing harassment from the bank’s employees and the recovery agents deployed by the bank for a month. Rajguru was tense as the agents would barge into our house and abuse us."

Rajguru is survived by two children and a cancer-afflicted mother. Recovery agents had been visiting the Rajguru’s residence February 2003 onwards. Dr Rajguru said: "The tension proved too much for him and on Tuesday, he collapsed and passed away. I hold the bank responsible for his death."

Rajguru’s death was caused by cerebral hemorrhage. Rajguru, 42-year-old computer engineer and a dealer in computer peripherals, had taken a loan of Rs 40 lakh to run his business in 1997.

Due to losses in business he failed to pay his installments. The bank then filed a case under Section 101 of the Maharashtra Co-operative Act in October 2000 and won the case, allowing the bank to liquidate his property and recover the amount. The bank claims to have recovered an amount of only Rs 20 lakh and is still seeking Rs 48 lakh from the family.

Last fortnight, the family had filed a case with the police against the recovery agents. However, the bank claims that it had not outsourced the recovery to any external agency.

"We have followed the guidelines laid down for recovery of loans. We have checked the facts and found that no individual from an external agency had visited the Rajgurus’ premises," the bank’s CEO Dilip Pendse said.

This is the second incident in the last month in Nashik, where a person lost his life due to alleged harrasment from recovery agents.

Suresh Chaudhari, a 54-year-old mechanic, died in the premises of ICICI Bank on January 13. His family alleged that the death was caused due to harassment by agents. The police filed cases against three ICICI Bank employees.

Recovery tactics employed by banks are increasingly coming under the scanner. The SC, on January 7, had strongly deplored the practice of financial institutions using musclemen to recover loans from defaulters and asserted that recovery of loans should be only through legal means.

"We are governed by a rule of law in the country. How can someone take possession by force? You cannot employ goondas," the Bench remarked while dealing with a plea by a bank challenging the registration of a criminal case against its officials for allegedly using criminal force against a loanee.